Its the compound interest formula. I would choose option 1. This formula applies when interest is earned on an annual basis and the interest is earned once a year.
2 Gather variables the compound interest formula.
The compound interest formula contains the annual percentage yield formula of. The formula for compound interest is P 1 rn nt where P is the initial principal balance r is the interest rate n is the number of times interest is compounded per time period and t is the number of time periods. And by rearranging that formula see Compound Interest Formula Derivation we can find any value when we know the other three. Continuous Compounding Formula P erf.